HLB Mann Judd Sydney director of superannuation Andrew Yee says changes coming into effect on 1 July this year are set to drastically reduce the amount people can contribute to their super, and those who have funds to put into super should do so now.
“From 1 July, the non-concessional contribution cap is reducing to $100,000 a year, down from $180,000 or if brought forward over three years, down to $300,000 from $540,000,” Mr Yee said.
“Further, people with more than $1.6 million in superannuation on or after 1 July 2017 will not be allowed to make any further non-concessional contributions.”
Small business owners who are considering transferring their business property into an SMSF or buying new business premises via an SMSF should consider taking action now.
“Doing so before 30 June 2017 means they can take full advantage of the current contribution caps. However, after 1 July 2017, the capacity for an SMSF to acquire a commercial property will be greatly reduced without having to resort to borrowing, which itself is under threat of being curtailed or even completely abolished,” Mr Yee said.
He said this current contribution opportunity is on par with that in the 2007 when the government allowed everyone a one-off non-concessional contribution limit of $1 million.
“It means those with smaller superannuation balances have the chance to make a significant start on their retirement savings, which they may not have the opportunity to do again and those with more than $1.6 million in superannuation, it may mean their last chance to top up their superannuation.”